Costs of the Stimulus

The stimulus has a big effect in 2010, but by 2012 the economy is roughly back to baseline (except for variables like the federal government debt).

...So there is short run gain from the stimulus bill, mostly in 2010, but the potential long run costs do not seem trivial. If the stimulus bill is passed and the bailout continues, it may be that large tax increases will be needed starting in late 2011 or 2012.

Well that should be fun, especially given that energy costs are bound to be higher, thanks to Obama's environmental pandering. Obama's energy non-policy may toss cold water on the recovery if higher costs limit economic growth.